DEVELOPMENT FINANCE FOR YOU.
Get the Financing You Deserve
Thinking about building?
Before you speak to a lender, ask yourself:
Can your development make enough profit?
Will the lender believe your exit strategy?
Can you demonstrate experience?
Will planning affect funding?
These are exactly the questions lenders ask.
At Always Wright Mortgages we've helped developers secure funding from single plots to multi-million-pound schemes.
WHAT IS DEVELOPMENT FINANCE
Development Finance is short-term lending that is given to Developers to build Residential and Commercial properties on Land, (Typically over a year). The developments are then sold to Companies and Individuals, and the loan is paid back.
HOW DOES IT WORK
The lender will typically lend the client up to 70% of the total cost of the Land (LTV) then often 100% of the build costs for the project. Not all lenders will offer to purchase the land AND complete the build at 100% though. This is where we source the appropriate Lenders.
The Purchase cost + Build Costs + Fees = Total Costs.
GDV is the Gross Development Value after the project is finished.
GDV - Total Costs = Net Profits.
WHAT FEES ARE INVOLVED
There are a number of fees involved when "building out" a development project. They are as follows (subject to lender):
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ARRANGEMENT FEE (A number of Lenders charge this)
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BROKER FEE
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SURVEY
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SURVEYOR SITE VISITS
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INTEREST PAYMENTS
These can vary from lender to lender, but they're important to see if a deal makes sense and will end up in profit.
Contact me to see how I can help with your next development project.
Development Exit Finance
Once a development is complete, refinancing onto a long-term facility is often the most cost-effective solution.
Case Study
Following the completion of a residential development, we refinanced the client's expensive development facility onto an investment mortgage, reducing monthly finance costs and releasing profits for their next project.
Ground Up Development
From single plots to large residential schemes, ground-up development finance requires careful planning and lender confidence.
Case Study
We secured funding for a developer building multiple residential units at £ 5 million each on completion, structuring staged drawdowns that ensured cash flow throughout the construction process and a successful completion.